The Cheesecake Factory (CAKE)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		205.64	166.40	153.48	80.93	53.74
DSO	days	1.77	2.19	2.38	4.51	6.79

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 205.64
= 1.77

The days of sales outstanding (DSO) for The Cheesecake Factory have been steadily decreasing over the years, which indicates an improvement in the company's ability to collect its accounts receivable efficiently.

In December 31, 2020, the DSO was 6.79 days, but by December 31, 2024, it had decreased significantly to 1.77 days. This trend suggests that the company has become more effective in converting its accounts receivable into cash, reflecting strong credit control and potentially favorable customer payment terms.

A decreasing DSO can free up working capital for the company and reduce the risk of bad debts associated with outstanding receivables. Overall, the declining trend in DSO for The Cheesecake Factory demonstrates efficient management of accounts receivable and a healthier liquidity position.